Our Allies... the Germans

[OmniDude]

Oh, and Leonidas: HI!

[HershOstropoler]

Leonidas:

"Ah, yes, nice neat legal obligations. . .
Have you never heard of countries defaulting?"

Sure. Yet no sanctions mean a nice amount of Iraqi oil income. Or do you think the US governemnt will siphon it off?

"In the past Germany did just this (defaulting on loans to the USA) which started a domino effect that helped plunge the world into the Great Depression."

Nonsense. Or you mean the bank crises? That was when the great depression was in full swing already. But nice try to blame the US created great depression on Germany.

"More recently, Russia and Argentina defaulted on massive loans."

They defaulted on debt service, and that temporarily. Result? Debt restructuring.

"If you think a creditor was able to slip a bill for all this damage into Saddam's mailbox"

Darling, where exatly does a good share of Iraq's oil revenue under the UN controls go?

Duncan:

"The French should be worried about losing these contracts."

Yes for the contracts, no for the debt.

"True the debt can not be cancelled, but the likelyhood of it being payed off should decrease which would decrease the value of the loan."

If Iraq gets a new government, there will have to be a debt restructuring plan. Actually Germany and France should be happy, cause the likelihood of repayment could be bigger than with today's Iraq that is crippled by sanctions and Saddam's policy.

Also, if opposition were about money, it would be easy to struck a deal with the US "support against guarantees".

[Dinner]

The debt probably won't be cancelled but I'd say things are wide open for a certain amount of renegotiation by the new Iraqi government. Things like interest rates, length of payment terms, and reductions of outstanding interest might be looked at if money gets tight for the Iraqis. The French won't want this to happen but I suspect the new Iraqi government will be equally opposed to paying for Saddam's destroyed army.

[Leonidas]

Originally posted by OmniDude I am inclined to see the post-cold war world as one big society and the US administration as the commander-in-chief of something like the "Global National Guard". However I strongly believe that they should be kept in check by the "Global Surpreme Court", the UN SC, and this is obviously NOT the way the stringpullers around Bush sees it.
Thank God for Colin Powell....

OmniDude: Hi

I know you are sincere in your outlook.

Many academics have proposed the very solutions you are suggesting.

Unfortunately, I fear this approach (however appealing it may look) is unworkable.

The USA, for better or for worse, has kept the world from falling into the abyss since the close of WWII. It is not perfect, and has made many mistakes. But it would be absolute folly and suicidal to see both the USA withdraw from its world commitments AND to have the so-called UN take over authority and/or have control over the USA's national sovereignty.

When has the UN ever been able to mandate a single peaceful solution in the world that has not been backed by American muscle?

What other country has had the gonads to ante-up when the chips are down?

If the day comes that the USA tires of its world commitments and becomes isolationist again; and if we hand over authority to the petty dictates and squabbling of the nations that make up the UN; then it will be a sorry time indeed. . .

If you want to see an example of what would happen if this should occur, then read a good history book that details the events from 1925 to 1941. . .

[Leonidas]

Originally posted by HershOstropoler
Leonidas:

Sure. Yet no sanctions mean a nice amount of Iraqi oil income. Or do you think the US governemnt will siphon it off?

"In the past Germany did just this (defaulting on loans to the USA) which started a domino effect that helped plunge the world into the Great Depression."

Nonsense. Or you mean the bank crises? That was when the great depression was in full swing already. But nice try to blame the US created great depression on Germany.

"More recently, Russia and Argentina defaulted on massive loans."

They defaulted on debt service, and that temporarily. Result? Debt restructuring.

"If you think a creditor was able to slip a bill for all this damage into Saddam's mailbox"

Darling, where exatly does a good share of Iraq's oil revenue under the UN controls go?

If Iraq gets a new government, there will have to be a debt restructuring plan. Actually Germany and France should be happy, cause the likelihood of repayment could be bigger than with today's Iraq that is crippled by sanctions and Saddam's policy.

Also, if opposition were about money, it would be easy to struck a deal with the US "support against guarantees".

HershOstropoler: All your well-laid out plans assume that Iraq even has an infrastructure after the war. If Saddam does what all military planners assume he will do, then Iraq will be nothing more than a heap of rubble covered by a nice chemical mist. . .

Of course, after defeating Iraq, the USA will pump millions of dollars into the country to build it all back up again. . .

Germany defaulting: And what do you think caused the American banking crisis?? The USA had loaned a great deal of money to Germany and Austria in the 1920s. Germany defaulted on its reparations payments and suffered hyper-inflation. When they defaulted on these loans, it helped start a liquidity crisis that reverberated throughout the banking system. This event, plus a host of other economic problems, helped pull the world into the worst effects of the Great Depression.

Here's a quick overview of just some recent financial problems:

1982 Mexico
Default on international loans sparks global debt crisis and "lost decade" for developing nations

1997 Thailand
Speculative boom triggers run on Thai currency; ensuing collapse signals "end of Asian miracle"


1997 Indonesia
Spreading Asian crisis takes social, political toll in region's largest, poorest country; Suharto deposed


1997 South Korea
IMF and U.S. forced to organize bailout of South Korean banks to prevent further spread of Asian "contagion"


1998 Russia
International financial instability spreads to Russia, which defaults on international loans; ruble is devalued


1999 United States
Contagion reaches Wall Street: Long-Term Capital Management hedge fund fails, endangering banking system

2002 Argentina
Argentina defaults on billions in debt; social and political unrest leads to resignation of two presidents in two weeks

[DuncanK]

HO,

No nation who owns debt in another country, and has business contracts with that country, wants to see that country invaded. That's the way the French and Germans are looking at it.

[OmniDude]

Leonidas,

I know what I'm asking is nowhere as simple to work out as it is to conceive of, but OTOH taking your presented stance effectively eliminates the very idea of the UN altogether, doesn't it? I mean, what is the point of having a global political body of politics, if it has no means of enforcing it's decisions, i.e. controls the surpreme military force on the globe?

To me it seems that the globalization process will be almost as corrosive on US borders as on any other nations. Remember in the 80's when the US public was all worked up about japanese takeovers in the US and the entrailing change in working culture?
Isolationism is no longer an viable economic option (this was really the lesson of the period between WW1 and WWII. Also remember that from the ashes of the LoN rose the UN)

As globalization and its associated rationalisation and demystification permeates societies and economies all over the world, wars will be less about territories, etnicity and belief and more about more naked economic conflicts of interest. This enhances the need for a strong UN.

The UN has had perhaps a decade in which to adjust to its newfound importance. Before the collapse of communism, they were not that important as a geopolitical body of politics, everything was decided in Washington and Moscow. Starting problems like the embarassing indecisiveness in the recent Yugoslavian conflicts were to be expected.
But perhaps the UN will be better at finding their gonads if the US would back off a bit from their relatively newly won status as undisputed world champions? Perhaps even put down the crown? I'm sure France and the likes would be more easily kept in check if the US decided to conduct their foreign policy more strictly through the UN than on their own.
It will take a helluva lot of character from any president/government to pull it off, it might even be unconstitutional by some readings, but perhaps still the best option.
To me it seems as if the US is in the slow process of overstretching it's power and is in danger of doing the Roman stunt: collapsing under the weight of it's own success and lack of any real opposition to keep the nation united. You've had a Civil War before, let's pray you won't have one again, given your arsenal.

Notice for instance the way politics in the US has become polarized regarding patroitism in a way that brings the McCarthy-era commie scare to mind.

Now even though this really isn't a flame bait, I think I'll retreat to my nuke-safe bunker anyway and wait for the barrage.
But please keep in mind that I am a born pessimist that loves to be proven wrong, so be gentle....

[Ned]

OmniDude, the UN is not able to affect the vital interests of its permanent members due to their veto. Thus, it had no effect on the cold war. Supposedly, with that over, the permanent members would all be on the same team and would confront meanaces to world peace. To date, this has been largely the case with the Iraq. However, the debate to this point has shown sharp differences between France, and the UK and the US on approach. Hopefully, the French can be pursuaded to back an authroization for force when Blix next reports Saddam's increasing lack of cooperation - which began after the last security council meeting showed the divisions among the permanent members.

However, if France vetoes a resolution authorizing force after a deadline (the rumored resolution) I think the US will more than likely - at least while Bush is president - no longer consult the UN where US vital interests are at stake. The UN may retrogress to a cold-war standoff between France, this time, and the US. France would continue to veto anything important to the US. The US just might return the favor and veto anything important to France.

[OmniDude]

Ned, I agree and I believe the transition will be painful, involve some unknown restructuring of the SC and not be without conflict. We are most definately entering troubled times. We'll have more Cuba Crisis-type confrontations before this is through. But in the end, I think economy will save us as long as democracy prevails. The (only?) good part of populism is that serious war is definately a Bad Sell(tm)

[HershOstropoler]

Leonidas:

"HershOstropoler: All your well-laid out plans assume that Iraq even has an infrastructure after the war."

Not necessarily. Makes it easier, but is not required.

"Germany defaulting: And what do you think caused the American banking crisis??"

Excessive lending during the 20s boom, stock market collapse, later the Fed kicking some banks out of its reserve system.

"Germany defaulted on its reparations payments and suffered hyper-inflation."

Germany had deflation after 1929. The hyperinflation phase ended in 1923. Reparation payments were rescheduled in 1930 and ended in 1932, IIRC.